CADE dismisses Azul and Gol’s codeshare notification

The Office of the Superintendent General at CADE (SG) dismissed the administrative procedure for the analysis of the agreement between Azul and Gol, allowing the companies to share domestic routes and loyalty programmes.

The codeshare agreement is a commercial cooperation among airlines by sharing routes within the air transport network. In addition, the document allows members of the loyalty programmes Azul Fidelidade and Smiles, to accumulate miles in their programme of choice when buying tickets for routes included in the codeshare.

After Azul and Gol publicised the agreement, the SG launched an administrative procedure to ascertain whether it is a merger of mandatory notification, and a case of gun jumping. Mergers have to be notified before consummation according to the Brazilian Competition Law and CADE’s regulations.

The analysis issued in the Expert Opinion of the SG assessed the agreement between the airlines using four requirements. The first is whether the operation had already lasted for two or more years. Also, the investigation verified if the document established a joint venture, sharing risks and revenue, and if the parties are still competitors in the relevant market.

The SG concluded that if the agreement is fully implemented, it meets all four requirements provided in CADE’s Resolution no. 17/2016. Therefore, it would be considered a merger of mandatory notification.

Regarding the alleged gun jumping, the authority verified that the agreement has been in force for less than a two-year period, and is not fully implemented yet. Additionally, the companies preserved the competitive environment.

It is important to mention that the analysis was restricted to the investigation of whether the codeshare had to be notified to CADE. Thus, according to the SG, the agreement has to be notified if it is fully in force for more than two years, according to Law 12529/2011.

Also, if notified to CADE, an actual merger between Azul and Gol is going to be reviewed in a specific proceeding and the possible competitive impacts will once again be analysed.

Access Case no. 08700.003565/2024-49.